Warning: Don't Be Fooled by Fake Checks

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FDIC Consumer News – Summer 2005 – Warning: Don't Be Fooled by Fake Checks


Related Consumer Finance Programs - The following sub-directories of companies offer a wide variety of financial programs to assist you with the management of your finances. Consolidate debt with a consolidation loan or use a debt counseling service or mortgage refinance for help with the consolidation of your charge card debt and other monthly payments.

  • Credit Debt Consolidation - Learn more on how consolidating your credit card debts can work for you and potential pitfalls that you need to avoid. Also, review a list services that offer to help people lower their bills into fewer payments or even one payment.
  • Credit and Debt Management - Do you feel that your credit card bills are stacking up with nowhere for you to turn? Your problem is not unique. Signing up with debt management firm may be the right solution to your debt problems. Review different firms offering these services to determine if this is the correct option for you.
  • Personal Loan Consolidation - These (typically) smaller loans are most often made available on an unsecured basis. Essentially, your property property or home will not used as security in order to obtain financing. The underwriting decision will usually be based upon your credit history and ability to make repayment according to the terms of the loan agreement.

Warning: Don't Be Fooled by Fake Checks

The FDIC wants to remind consumers that fraud artists are using counterfeit cashier's checks, money orders and other checks to trick victims into sending money. Many of these scams involve offers that arrive by mail or e-mail or that are in connection with Internet sales.


"The volume of fake checks reported to the FDIC in the last two years has increased dramatically," said Michael Benardo, manager of the FDIC's Financial Crimes Section. "The increase is due in part to crooks using advanced copying and printing technologies to produce authentic-looking counterfeit documents."


Here are examples of common scams:

  • You get a cashier's check in the mail along with a letter congratulating you for having won a lottery. Then you're asked to send money to process your claim or to provide confidential information to open an account at "their" bank to receive your winnings. If you don't remember entering the lottery, this is probably a scam aimed at obtaining your money or personal information that can be used to commit other frauds.
  • You receive an e-mail or fax from a stranger saying he or she can't get a large sum of money out of a foreign country because it has been "frozen" by the government. You're told that with your help—and money to pay up-front expenses or the temporary use of your U.S. bank account—the stranger will give you a check once the funds are recovered from abroad. Of course, the money you send will likely be gone, your bank account could be drained if you give them your account number, and any check you receive is most likely worthless.
  • You sell an item over the Internet and the buyer sends a money order for an amount more than the agreed-upon price. The buyer instructs you to wire the excess funds back. If you comply, you will most likely find out that the money order is phony and the money you wired cannot be returned to you.

In these examples, if you deposit or cash the check or money order it likely will not "clear" (be paid) when it is sent to the bank on which it is supposed to be drawn. And, the fraudulent check will likely be returned to your bank and charged against your account. Depending on the circumstances and your state's laws, you may be held responsible for the entire amount of the fraudulent check.


In general, be very suspicious of offers that seem too good to be true. "Be smart and don't be tempted," said Benardo. "Stop and ask yourself, 'Why would someone I never met contact me for help getting money out of a foreign country? 'Why would a stranger send me a big check for no apparent reason?'"


When in doubt, Benardo added, "it's usually best to walk away from the deal immediately."


For more information about protecting against counterfeit checks, see a special report in the Spring 2003 FDIC Consumer News online at www.fdic.gov/consumers/consumer/news/cnspr03/index.html.


Summer 2005 | Your Personal Information May Be at Risk | Don't Be Fooled by Fake Checks


FDIC Consumer News is published by the Federal Deposit Insurance Corporation


FDIC Consumer News is produced quarterly by the FDIC Office of Public Affairs in cooperation with other Divisions and Offices. It is intended to present information in a nontechnical way and is not intended to be a legal interpretation of FDIC or other government regulations and policies. Mention of a product, service or company does not constitute an endorsement.


Find current and past issues of FDIC Consumer News at http://www.fdic.gov/consumernews. Refer to this same index to locate the issues that are specially formatted for being reprinted in any quantity.


To receive an e-mail notice about each new issue of FDIC Consumer News posted on the FDIC Web site, with links to stories, follow instructions posted at www.fdic.gov/about/subscriptions/index.html.


Last updated on 8/15/2005

Consumer resources and related info:


Make the correct decisions when shopping for banking, debt consolidation and related financial services. Educate yourself!

The Debt Consolidation Loan Directory has a growing library of free informative / educational financial resources for consumers shopping for many types of services related to the management of your money, such as consolidating credit card debts, fraud alerts and car insurance. There is no better way to make decisions regarding the management of your personal finances than to read and understand how they work. Please feel free to visit our consumer resource library for more information.

  • Cell Phone Banking - New cell phones are constantly evolving and becoming more sophisticated. This includes adding the capability of handling online banking through your phone. This FDIC article discusses some of the possibilities and precautions you should take when using your phone for banking purposes.
  • How to Protect Yourself with FDIC Insurance - Read up on what qualifications are necessary and how to determine if your deposits are covered by FDIC insurance.
  • Direct Deposit Safer than Checks? - The US Treasury Department reports that a majority of surveyed consumers mistakenly believe that paper checks are safer than direct deposit.
  • Consider the Fees! - Learn what to look for and examine the details of each banking account offer for possible fees, such as: inactivity, minimum balance and ATM withdrawal fees.

Please Note

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